Art as investment? Here's good advice

Buying art as an investment is like jumping into the deep end for the first time. Make sure a lifeguard is watching.

That’s advice from Sebastian Clarke, director for estate services at Rago Art and Auction House in Lambertville, New Jersey, and a regular guest on the long-running PBS “Antiques Roadshow.”

He was at Clark Art Private Reserve Gallery, a Mercato showroom devoted to the burnished paint-on-metal canvasses of its owner-artists, Roy and Amanda Clark, to lecture about art as an investment last Thursday. The event also was something of an introduction for Rago, which recently placed a regional representative, Laurie Hilburg, in Naples to work with people looking to sell art at auction.

“While people tend to buy with their heart, it’s kind of good to have a cool-down period,” Clarke observed before talking with the first of two audiences of Naples art owners that night. “Do your homework, especially when you’re buying for your portfolio.”

Just as most of us have an adviser for financial instruments, Clarke would recommend an adviser for art: “We’ve dealt with estates where there’s an art adviser as well as a financial adviser, and it’s a tremendous asset to have someone who knows exactly what’s in the collection, what its current value is and where it came from.”

Clarke offered several critical points in buying and owning art as an investment:

Stay aware of your art’s current value and insure it for that. Clarke and Hilburg both recommended having one’s art appraised every three to five years and adjusting insurance accordingly.

Clarke recalled the horror story of a Manhattan couple who had carried insurance on a Mark Rothko painting for the price they paid — around $10 million. A remodeling accident caused a ceiling to fall and ruined the work.

“Since a lot of insurance policies offer 150 percent of the purchase value, the couple received $15 million,” he said. “That sounds good, right? But the value of that painting had risen to $60 million.”

Make sure you have the provenance — that is, a thorough, documented history of your work — and that the provenance is authentic.

“Hearsay is not provenance,” Clarke warned. “‘A family member told me it came from ...’ is not provenance.” Even some documentation may not be provenance, he added.

That’s where the work of an art appraiser comes in, and unfortunately, where the field is weedy.

“Sadly, in our business, anyone can put a sign out and say they’re an appraiser,” Clarke said.

Use a credentialed appraiser. Look for someone, Hilburg said, who has passed certifying tests and is a member of one of three appraising organizations: Appraisers Association of America, of which Clarke is a member; the American Society of Appraisers; or the the International Society of Appraisers. (The ISA offers questions to ask a potential appraiser on its website: See the sidebar.)

Rago Arts and Auction Center has several of its appraisers on the show, possibly because many of the items coming in are of the midlevel price range in which it operates.

“Everyone is familiar with the name Sotheby’s — they’re a well-known name, but they’re interested in the extremely high market,” said Clarke, who is himself an alumnus of its European Furniture department.

“They’re doing $70 billion a year. A $50,000 to $100,000 piece might not get the same attention from them. But that range is one of Rago’s core strengths.”

As an appraiser whose work is being seen by millions on TV, Clarke says he holds himself to an even higher standard than his association demands. That includes generous amount of diplomacy with hopeful guests who bring him their treasures.

His biggest challenge came just a few weeks ago: a 3-foot fiberglass unicorn in Tucson, Arizona.

“It was so hideous, I had to try so hard to treat the guest with the respect they deserve. But in the end, I had to tell them they had a very colorful piece of — decorative art,” he said.

Only a few weeks before, he may have been at one of his most exciting shows: A decorative backdrop caught on fire. But it was quickly contained and only delayed the taping.

Clarke offered one final piece of advice for the public: Don’t assume what you have is worth nothing and allow it to be carted off for junk. He recalled the couple who sold a sterling silver basket for 25 cents at a yard sale.

It turned out that the basket was made by the artist-led crafts collective Wiener Werkstatte, circa 1910.

“We offered it at auction and it sold for in excess of $30,000,” Clarke said. “And that money didn’t go to the original owners.”